Grown Rogue Reports Second Quarter 2024 Results

Recorded record quarterly revenue of $7.7M compared to $6.3M in the three months ended July 31, 2023, an increase of 23% Operating Cash Flow (OCF), before changes in working capital (WC), of $1.2M compared to $1.9M in the three months ended July 31, 2023, a decrease of 38%, related largely to an increased ramp of SG&A spending in preparation for the launch of New Jersey in 2H 2024 and one-time royalty and consulting payments to our Michigan partner only incurred in 2024 Free Cash Flow1 (FCF) of $0.9M, after accounting for $1.0M in cash advances to fund construction in New Jersey cultivation facility Received Licensing Approval in New Jersey and closed Option 1 to Acquire 44% of ABCO Garden State, LLC ("ABCO"), the Company's New Jersey operation Increased ownership of Michigan operations to 80% Reduced outstanding debt by $1.75M through the proactive conversion of outstanding convertible debentures not due until 2027, decreasing the Company's ongoing annual cash interest by $0.2M MEDFORD, Ore., Aug. 27, 2024 /CNW/ - Grown Rogue International Inc. ("Grown Rogue" or the "Company") (CSE:GRIN) (OTC:GRUSF), a craft cannabis company born from the amazing terroir of Oregon's Rogue Valley, is pleased to report its second quarter 2024 results for the three months ended June 30, 2024. The comparison period for 2023 is the three months ended July 31, 2023, due to the recent fiscal year-end change from October 31 to December 31. All financial information is provided in U.S. dollars unless otherwise indicated.  Second Quarter 2024 Financial Summary ($USD Millions)  Second Quarter 2024 Summary  2024 2023*  +/- %  Revenue  $7.7 $6.3 +23 % aEBITDA  $2.5 $2.1 +21 % aEBITDA %  32.7 % 33.2 % -50 bps  OCF (Before Changes in WC)  $1.21  $1.9 -38 % OCF %  14.9 % 29.5 % -1460 bps  *Comparable 2023 data is May-July due to the fiscal year end change 1) Includes $0.5M in one-time consulting and royalty fees only incurred in 2024 Management Commentary   "This was another exciting quarter for Grown Rogue with record revenue and aEBITDA showing the continued execution by our team. We continue to see strong sell-through, record indoor production in both yield and revenue, continued consumer loyalty with our existing products, and strong consumer response to our new, branded pre-rolls – moderated somewhat by market pricing softness in Oregon and Michigan in the quarter.  We want to thank our customers who are continuing to find value in our offerings, and we strongly believe that high-quality, low-cost cannabis cultivation, that delights consumers, is a protectable moat when done at the proper scale," said Obie Strickler, CEO of Grown Rogue. "We had a decline in our operating cash flow before changes in working capital, which was largely attributable to the ramp of SG&A spending in advance of launching New Jersey and some royalty and consulting payments to our Michigan partner that were only incurred this year.  We maintain a strong balance sheet with a positive working capital position, minimal debt, and sufficient cash to fund our near-term plan, so we continue to be well positioned to take advantage of new market opportunities. Our primary growth drivers in 2024 and 2025 continue to be our expansion efforts in New Jersey and Illinois. We expect sales in New Jersey in the fourth quarter of this year and will have an update on the specific timing very soon. Illinois design and engineering is underway, and we are targeting sales starting in the second half of 2025. Our plan for expansion remains one new market every 9 to 12 months, but we are only going to swing at the fat pitches," continued Mr. Strickler. "I want to personally thank all of our customers, the entire Grown Rogue team, and our supportive shareholders for each doing their part to help Grown Rogue achieve our goal of becoming the first nationally recognized craft cannabis company in the U.S." Oregon Market Highlights ($USD Millions)  Oregon  Q2 2024  Q2 2023*  +/- %  Revenue  3.7 3.2 +13 % aEBITDA  1.1 1.1 +2 % aEBITDA Margin %  31.3 % 34.6 % -330 bps  * 2023 data is May-July Michigan Market Highlights ($USD Millions)  Michigan  Q2 2024  Q2 2023*  +/- %  Revenue  3.5 2.8 +22 % aEBITDA  1.6 1.3 +18 % aEBITDA Margin %  45.6 % 47.1 %  -150 bps  *2023 data is May-July Michigan operations are through Golden Harvests, LLC.  Financial Statements and aEBITDA reconciliation   Consolidated Statements of Financial Position June 30, 2024 December 31,2023 $ $ ASSETS Current assets Cash and cash equivalents 7,521,886 6,804,579 Accounts receivable 2,337,007 1,642,990 Biological assets 1,700,167 1,723,342 Inventory 3,839,952 5,021,290 Prepaid expenses and other assets 527,937 420,336 Notes receivable 2,016,422 - Total current assets 17,943,371 15,612,537 Property and equipment 9,354,186 8,820,897 Notes receivable 4,325,033 2,449,122 Warrants asset 3,717,688 1,761,382 Intangible assets and goodwill 725,668 725,668 Deferred tax asset 391,465 246,294 Other investments 2,034,782 - TOTAL ASSETS 38,492,193 29,615,900 LIABILITIES Current liabilities Accounts payable and accrued liabilities 1,828,943 1,358,962 Current portion of lease liabilities 724,742 925,976 Current portion of long-term debt 608,929 780,358 Current portion of business acquisition consideration payable 1,904,649 360,000 Derivative liability1 13,800,806 7,471,519 Income tax payable 1,640,850 873,388 Convertible debentures2 1,964,092 - Total current liabilities 22,473,011 11,770,203 Lease liabilities 1,657,353 1,972,082 Long-term debt 1,615,972 82,346 Convertible debentures - 2,459,924 Business acquisition consideration payable 1,277,233 - TOTAL LIABILITIES 27,023,569 16,284,555 EQUITY Share capital 37,114,080 24,593,422 Contributed surplus 8,142,520 8,186,297 Accumulated other comprehensive loss (115,941) (108,069) Accumulated deficit (34,784,564) (20,353,629) Equity attributable to shareholders                                        10,356,095 12,318,021 Non-controlling interests 1,112,530 1,013,324 TOTAL EQUITY 11,468,625 13,331,345 TOTAL LIABILITIES AND EQUITY 38,492,193 29,615,900   1) Represents ...